No thanks Keith. Let them understand my simple law. Cause me no harm or loss. That's Common Law. Natural Law. The highest law on the planet. Cause me tort and I'll take you to Queens Bench. The highest "Law"court in the land where statutes and legislation have no standing. Everything else is "Legal". And there's a helluva difference between lawful and legal. A helluva difference.

What debt ? I assume you mean Cornwall Council ? Are they in debt ? They say they are but I don't believe them. There's one easy way to settle that though. SHOW ME THE ACCOUNTS. Let's have a look at the CAFR !
In fact, how about an audit of every Government Department/Corporation/Company ? That would be fun.

Do you ever wonder what a town based on the principles of solidarity, cooperation and autonomy might look like? Marinaleda, Spain offers a taste, and Dan Hancox’ new book about it, The Village Against the World, offers an accessible, balanced and inspiring peek into what a microcosm of a better world could look like.

It can be hard for those of us who see ourselves at the progressive end of the political spectrum to not feel like we spend all our time trying to stop bad things from happening; wars, austerity cuts, fracking, obscene banker bonuses... There is no shortage of things we want to put an end to – the worlds of national and international politics are basically made of such things, not to mention a fair bit of more local political discussions.

Thus, it’s not uncommon to find ourselves spending a disproportionate amount of our time fighting against, rather than building for, as though, without whatever the latest atrocity we are protesting, the status quo would represent the perfect world we dream of living in.

This may be a significant reason why more people aren’t inspired to take part in the kinds of opposition we do; they aren’t content to simply be against something, without at least an inkling of something inspiring to support, should we succeed in stopping the latest excess or atrocity.

Luckily, the bad news we spend so much time fighting isn’t the whole story – far from it, in fact.

Another story has been playing out in the south of Spain for more than thirty years. In the ashes of the Franco dictatorship, the Andalusian town of Marinaleda took the first steps towards a very different way of living together. Through a combination of hunger strikes, marches, land expropriations, media stunts and cooperative ownership, the town became what some describe as a ‘communist utopia’ in the middle of the economic wasteland that is most of Spain in 2014.

British journalist Dan Hancox spent time in Marinaleda trying to discover the town that exists between the hyperbolic descriptions of paradise readily dispensed by the town’s charismatic mayor, and the hate vitriol of the country’s more conservative elements. His story, published as The Village Against the World, is balanced, inspiring, and an enjoyable read.

The especially good news though, is that, all-in-all, the town lives up to much of its promise. Built on principles largely counter to those of the free market, Marinaleda has shown what it can look like for a town of nearly 3,000 people to live together in a sustainable, cooperative and democratic fashion, even if surrounded by communities and economies built on very different values.

Hancox’ doesn’t accept the glowing accounts of the town at face value, nor does he cynically poke holes through every minute inconsistency between rhetoric and reality. Instead, he gives space to both Marinaleda’s champions and its critics, and comes to the conclusion that the town is indeed imperfect, but far less so than any of its counterparts around Spain, where unemployment and poverty have been the dominant narratives since the global financial crisis took hold.

“Our aim was not to create profits, but jobs,” Marinaleda’s bearded leader, Juan Manuel Sánchez Gordillo told Hancox. “This philosophy,” Hancox writes, highlighting the philosophical roots of the town’s political project, “runs directly counter to the late-capitalist emphasis on ‘efficiency’ – a word which has been elevated to almost holy status in the neoliberal lexicon, but in reality has become a shameful euphemism for the sacrifice of human dignity at the altar of share prices.”

Since Gordillo won the local elections in 1979 and became the town’s first elected mayor after the death of General Franco, he sparked a journey that few would have imagined possible. In the coming decades, Sánchez Gordillo led the occupation of farmland owned by a local aristocrat, eventually winning the community rights to it; supported local infrastructure development; opened a processing plant for olives (providing further local employment), and began to build basic homes for residents, who only pay 15 Euros per month for their mortgage.

While there is little in the way of public criticism of ‘el alcalde’ (as Gordlllo is affectionately described by his supporters), there is also minimal censorship of the town’s less-radical minority. Hancox effectively questions the contradictions of a town built on democratic principles, which isn’t entirely friendly to its own critics, but still comes to the conclusion that the costs of opposing Gordillo are relatively minor inconveniences, compared to the level of challenge the community faces from outside forces.

Marinaleda is a town that appears guilty of a certain degree of hero worship, a question that has led many to question its future, in a time after the aging Sánchez Gordillo passes on. It also has a critical, yet highly-dependent relationship on the wider state, which creates other vulnerabilities for the local project. However, this can’t hide what the town has been able to achieve.

Dan Hancox’ writing occasionally gets stuck in overly-extended anecdotal prose, but otherwise offers a beautifully winding journey into and around a kind of community that few of us have ever experienced. That said, I would argue that Marinaleda is in fact less unique than many might believe when reading Hancox’ book. A year spent in the south of Mexico introduced me to another town that had taken a similar approach; Capulalpam de Méndez, Oaxaca.

The people of Capulalpam had succeeded, through collective decision making processes and direct action, in evicting a Canadian gold and silver mining company in 2007. Not only that, they rebuilt the community on the basis of community-owned businesses, eco-tourism, and the ‘techio,’ a Zapoteco indigenous tradition, in which locals ‘pay tax’ by taking part a range of essential community services. The town’s leaders regularly denounce capitalist encroachment on their area and have taken a range of direct actions to fight-off the circling vultures of international mining, still hungry to rip the last traces of mineral wealth from the local hillsides.

...Which is all a way of saying that Marinaleda – like Capulalpam – may be unique, but that neither town’s story should be dismissed as pure anomaly (and thus something the rest of us are unable to learn from); quite the opposite. Like the Zapatista communities in Mexico, they encourage those inspired by their efforts to come and see how they have been able to do what they have done, in order to bring inspiration from these experiments back home with them.

And with that in mind, I’m planning a trip to the south of Spain. Thank you Dan Hancox for highlighting a much-needed example of the kind of reality all of us concerned about creating a better world could be fighting to grow. Let’s not let its learning pass us by!

Graham @ A simple Google of "Cornwall Council balance sheet" took me immediately to their latest accounts. The url is too long copy here, just Google the above phrase and it's the first entry. These are afaik a/c that have been signed off by the auditor, not estimates, projections, budgets etc. The American terminology you quote (like most of your Freeman nonsense) has no relevance outside the USA. I am not an expert on local government finance, simply familiar with normal business a/c's so I couldn't tell you if they're up to any kind of sophisticated fiddles. However you or anyone else is free to consult with suitably qualified experts who would be able to detect any such dodgy dealing. So there you are, all the facts, please use them as the basis of any further arguments.

Basically as with everything else, if you want to criticise the Council's finances, and you may well have just cause, you have to base it on the actual figures, not something you've pulled out of thin air!

Fulub @ Such ventures are tried from time to time and it's always worth having another go. The problem is essentially one of capital and then of trust. The sad fact is that the only people who are keen on sharing are usually those who are piss poor (and so have nothing to lose). Those with substantial capital will generally be doing OK under the status quo and so have little incentive to pool resources beyond their family. The main exceptions are religious groups and most of these are end up being taken over by a Guru with 20 Rolls-Royces. More commonly one or two well meaning well-off folks will acquire property and invite others to join them, but once other members start having ideas of their own the 'owners' assert their legal authority and start dictating terms, so the whole thing then falls apart. The best approach is therefore to raise capital from a wide range of supporters, most without any direct personal involvement in the project. This means that you are not dependent on the good will of a small number of rich people. Basically you act like a bank and keep enough liquid reserves to allow for individuals to withdraw money from time to time, and allow others to invest of course. There are various legal arrangement that can be used. I'm not currently up to speed with all the relevant legislation but I can research this area or pass on enquiries to people who are currently 'in the know' should anyone be seriously interested in this approach. However when in the past I tried to sell these ideas to the Cornish I got nothing more than blank incomprehension. Co-operatives and similar do not seem to resonate with the Cornish ethos, which seems much more individual/family orientated.

I suspect that more people need the ability to understand a balance sheet than to comprehend the infinitesimal calculus, yet the schools teach the latter but not the former. Now there we might well have a cunning plan to keep us oiks in our place.

Money is currently produced by a ‘public-private partnership’ between the state and the financial sector, a partnership whose nature remains obscure to the great majority of the population. Is another distribution of knowledge – and hence of power – possible? This, argues, Geoffrey Ingham, remains the crucial question for socialists.

The basic structure of capitalist monetary systems originated in Europe during the 15th and 16th centuries[1]. The most distinctive feature has been the gradual integration of privately organised banking networks (giros), for clearing and settling payments between producers and traders, with states’ issue of public currencies. Was this, as is widely accepted, a process of ‘evolutionary selection’ which has produced an increasingly effective system? Or, do we have a suboptimal outcome that owes its existence to the advantages that it confers on the major agents – the banks and states? If it’s the latter, can we do better?

Banks make profits by creating money from debt contracts with their borrowers who pay interest on the loans. It is essential to be clear that these are private debts (between two private agents: bank and borrower) which are transformed into public money (currency) by means of the links between the banks, the central bank, and in turn the link between these two to the state. Modern banks don’t merely lend money that has been deposited by savers; rather new money is produced by loans that create deposits for a borrower. Private debts – what has been borrowed – are spent as public currency. It is often said that banks create money ex nihilo – that is, out of nothing. But this way of looking at the process derives from seeing money as a material ‘thing’, which is based upon the old metallic currency conception of money. In modern capitalism, money it is not produced from ‘nothing’; rather it originates in the borrower’s promise to repay the private debt to the bank. In short, banks undertake two activities that are essential for the capitalist system: they operate the payments system and they create the credit-money by which it is financed.

In early modern Europe, private banks issued their own means of payment in the form of paper bills and notes which circulated within trading networks across Europe and the Near and Far East. The viability of these private payment networks was almost entirely dependent on the timely settlement of debts which, in turn, depended on the continuity of production and trade that made this possible. However, the vagaries of bad harvests and constant warfare, in addition to routine business failures and defaults, rendered the monetary networks unstable and fragile. Where states were able to establish a credible metallic standard and to impose and effectively collect taxes, denominated in their monetary measure of value (money of account), they were able to provide a stable public currency. In many regions, these two monetary systems remained quite separate and antagonistic – as in China and Islamic states.

Private mercantile money enabled tax evasion (as it does today with Bitcoin and local exchange systems), and as a source of autonomous power it was resented by states. Despite the integration of private and public money in capitalism, the underlying antagonism has not been entirely eliminated. In the USA, for example, the conflict between democratic government and the ‘money powers’ persisted into the early twentieth century and surfaced again in the opposition between ‘Wall Street’ and ‘main Street’ in the wake of the Great Financial Crisis (GFC) of 2007-8[2]. But it is truly remarkable that this did not develop into a more radical and politically focused response.

In some European states, especially England, from the late 17th century onwards, private mercantile money and states forged a relationship in which each eventually came to depend on the other for long-term survival. In pursuit of domestic and geopolitical power, states borrowed from the merchants, and thereby escaped from the financial straitjacket imposed by the scarcity of precious metal currency, without having to debase the coinage and risk loss of legitimacy. Loans to states were organised by consortia of private bankers in return for which they were granted the lucrative monopoly to form ‘public’ (later ‘central’) banks. In this way, paper bills and notes used in the private banking payments system were ‘hybridised’ with states’ metal currency. Private bankers had access to the state’s backing of the currency which, in turn, greatly enhanced the acceptability of their own notes. (In very small print at the top of today’s banknotes, the Bank of England still anachronistically ‘promises to pay the bearer the sum of £5’. This is now five base metal £1 coins, not five gold sovereigns issued by a royal mint.) Backed by the state, Bank of England notes, for example, were soon most in demand, and by the early twentieth century they eventually supplanted the private issue of banknotes by the myriad independent ‘country’ banks. By the late nineteenth century, the Bank of England was no longer a mere intermediary between the state and the banks. Rather, it had become the ‘lender of last resort’ by providing money to save the banking system from a destructive chain reaction of defaults during financial crises. This is now augmented by a routine drip feed of loans to the banking system which has been augmented since the GFC in the guise of ‘quantitative easing’.

Thus private capitalist banks are able to ‘advance’ money into existence on the basis of the support they receive both routinely and in crises from the central bank and, in turn, from the state. Looking at the system from the other side of the links, we may say that the state ‘spends’ money into existence when its treasury, using its central bank account, pays for the goods and services that it buys from the private sector)[3]. These payments are deposited in the private banks, increasing their reserves held at the central bank which are available to maintain the economy’s payments system. Despite the recurrent crises, persistent malpractice, and predatory levels of remuneration coupled with incompetence, it could, with some effort, be argued that capitalist banks do discharge basic functions – the payments system is never seriously disrupted and some level of credit money continues to be created. However, as even this minimally acceptable performance now depends entirely on the support of the state and its central bank, it could be argued that the private banking system should be placed under public control on the grounds of both efficiency and equity.

Currently, there is a lively debate in some academic economic circles about the ultimate point of origin of money creation – that is, a debate about ‘whose money is it’? Does money start its circuit from state expenditure or from advances by the banking system, including the central bank? Is the treasury account at the central bank merely a ‘useful fiction’ that reinforces the belief that governments need ‘our’ money in taxes? Does the state first need our taxes in order to spend or do we need to acquire the state’s money in order to pay them? In the absence of sufficient tax revenue states sell bonds to finance spending; but whose money does it borrow? Is it that which has been created in the private banking system or its own money that it has spent into existence[4]? Aside from the arcane technical details of the balance sheets and transfers between treasuries, central banks and the banking system, these questions are fundamentally about who has the power to create and control money. Arguably, this is the most important source of power in modern democracies, but it is largely outside democratic control.

These arrangements--the pivotal ‘public-private partnership’ in capitalism--bring both benefits and costs. On the one hand, the transformation of private debts into public currency, especially after the abandonment of the gold standard, has enabled the vast expansion of finance upon which modern capitalism is based. It is a major source of ‘infrastructural power’ – that is, the means of collectively getting things done. On the other hand, a range of deleterious consequences follow from the private control of this collective capacity. The production of money is operated as a profitable franchise underwritten by the public sector. Banks make their money by selling debt and consequently there is a constant tendency for its volume to increase to the point at which destabilising defaults occur. Collective infrastructural social power and systemic fragility both increase simultaneously – a genuine contradiction for which, as such, there is no final resolution within the existing system.

In the short term at least, as operators of the payments system and the immediate source of credit-money, private producers and controllers of money are ‘too big’ to be allowed to fail in the crises that their activities bring about. Furthermore, this monopoly power in the control of the production of credit money is exercised ‘despotically’ by the power to impose rates of interest and to rig markets to extract more value – as in the recent manipulation of the Libor rate and foreign exchange markets. In a further expression of the ‘too big to fail’ dilemma, regulators are increasingly reluctant to impose further large fines for these transgressions for fear of weakening the banks’ capital and ability to withstand crises.

The complexity of this hybridisation of public and private functions means that the question of who is responsible for the aims and conduct of monetary policy remains obfuscated and continuously contested. For example, the government is engaged in a futile attempt to exhort banks to lend to small and medium enterprises, but cannot command them to do so. Given the self-inflicted damage of the GFC, banks prefer to repair their balance sheets. The impasse is entirely a result of the structure of the existing system. The ambiguous and vacillating status and role of central banks as expressed in their dual roles as agents of governments and guardians of the private banking system is a constant source of tension. For example, the fad for ‘independent’ central banks in the late twentieth century was intended to persuade foreign exchange markets that freedom from manipulation by profligate governments would enable them to control inflation. However, the façade of independent neutrality has become increasingly difficult to maintain since the crisis[5].

What is to be done? This brief introduction to the question is not concerned with the widely discussed details of the proposed reforms to the existing system – increasing capital adequacy ratios; separation of the lending and payments settlement from speculation/investment banking and so on. Leaving aside the political struggle that it would involve, the focus here is on the fundamental issue of whether basic public-private linkage and the franchising of the state’s monetary sovereignty could be abolished. Moreover, this question is not merely about money, but entails two unresolved doubts about the possibility of a feasible democratic socialism. First, by what democratic means might a public agency reach an agreement on the principles and management of the supply of money – how much and to what ends? A necessary precondition for the formulation of any answer is an adequate theoretical understanding of money. In this way, the money question is soon shown to be the question. Second, the ‘socialist calculation’ debate of the 1920s and 1930s will have to be revisited. Opponents of socialism contended that as we can never have sufficient knowledge effectively to plan an economy, the adaptive reflexivity of decentralised (or ‘market’) mechanisms, including demand and supply for money, is the only viable alternative.

The growth of finance over the last forty years has changed capitalism profoundly. It is time for its critics to grasp the nature and significance of these changes. Only then will the supremacy of finance face an effective challenge.

The rise of finance during the last four decades is the most prominent feature of contemporary capitalism. Finance has grown enormously in terms of assets and profits, its markets and institutions have become global, its concerns dictate economic policy, its influence shapes the political process. Non-financial enterprises may borrow less from banks, but engage in financial activities to earn profits. Finance has also permeated the lives of individuals and households in unprecedented ways. Private financial institutions now determine the choices made by millions in housing, education, and health, and even influence the ethics, morality and customs of everyday life. Contemporary capitalism can rightly be called ‘financialised’.

The gigantic crisis of 2007-9 has brought to the fore the financialisation of capitalism. The crisis emanated out of a vast financial bubble in the USA, pivoting mostly on real estate, involving loans to the poorest US workers, and fostering manic financial alchemy that secured trading profits, fees and commissions for banks. The bursting of the bubble threw the global economy into a recession that subsequently required a vast mobilisation of social resources to be tackled. Policy makers aimed to protect financial profits, a task they achieved by driving interest rates close to zero, while also making public funds available to the financial system. The costs of the crisis were borne by society as a whole through persistent austerity and wage restraint.

In the summer of 2008, when the crisis was at its sharpest, it briefly looked as if there might be significant changes to mainstream economic theory and policy. There was talk of a ‘Minsky moment’ and even radical-sounding policy ideas about controlling finance. Unfortunately, normal service was soon resumed and mainstream economics continued to preach the virtues of the market, typically ascribing economic ills to (often imaginary) faults of the state. Five years after the crisis, economic theory appears not have noticed any structural changes in capitalism, and nor any weaknesses in its own approach to capitalism. Even worse, little of substance has changed in the realm of policy and financialisation continues to reign unchallenged.

Equally striking, however, has been the response of Marxist political economy to the most gigantic turmoil of world capitalism since the end of the World War II. Marxist theory was initially at a loss as to what to say, but it soon began to produce arguments that sounded remarkably as if nothing novel had actually taken place. For many, the cause of the crisis is – apparently – the tendency of the rate of profit to fall, implying that the roots of the turmoil lie in production and finance is merely an epiphenomenon. Focusing on finance, presumably, runs the risk of treating the crisis as the outcome of mistaken policy rather than a development deeply rooted in the social relations of capitalism. Harsh as it might sound, there is a strange symmetry between such Marxist arguments and the intellectual immobility of neoclassical economics.

Facts, however, are stubborn things. Try as one might, it is simply impossible to put together a convincing explanation of the gigantic crisis of 2007-9 based on the tendency of the rate of profit to fall, even if a commonly agreed measurement of the rate of profit could (ever) be arrived at. There was no fall of the rate of profit prior to the crisis that was remotely commensurate with the turmoil that actually occurred, not to mention the protracted difficulties of accumulation that followed. To be sure, the long-term performance of the rate of profit has remained problematic in recent decades, and that is indeed a characteristic feature of financialised capitalism. But the long-term trend of the rate of profit does not amount to a theory of crisis.

Five years after the crisis, the reality of mature capitalist countries is grim. Financialisation continues unchallenged, mainstream economics is completely bereft of new ideas, and class tensions are on the rise, particularly in Europe. Heterodox thinking, with Marxism at its core, has a vital role to play in analysing the state of contemporary capitalism and in offering fresh ideas on policy and action. But for that, it must first acknowledge financialisation and treat it with the seriousness it deserves.

The crisis that shook global capitalism in 2007-9 is a crisis of financialisation. It resulted from a vast financial bubble in 2001-7 that matched the extraordinary rise and transformation of finance in the preceding period. The crisis was certainly not merely the result of monetary and credit policy, but reflected the profound structural financialisation of contemporary capitalism. For the same reason, the crisis has cast fresh light on a range of radical policies that are urgently required to confront and reverse financialisation: public ownership and control over financial institutions, public investment, preventing productive enterprises from playing games in financial markets, reducing the exposure of households to private finance for housing, health, education, pensions and so on. Measures of this type are intrinsically anticapitalist, opening new avenues for the communal and associational organisation of society. Reversing financialisation could open new paths toward socialism.

Graham @ Up near the top of this page you happened to mention "Queens Bench. The highest "Law"court in the land where statutes and legislation have no standing", your words.

As it happens I've just been reading through a recent appeal court judgement "In the High Court of Justice, Queen's Bench Division". It relates to the provision of services in the Welsh language, that's why I looked it up. Anyway if you care to glance through the judgement you'll see that it mostly revolved around the interpretation and interrelation of different statutes. That interpretation then sets a precedent, which becomes an addition to the English (& Welsh) Common Law, that is the Law created through the ages by judicial decisions. Now please don't come back and try to tell me that black is white when here it is in black and white

Keith, Queens Bench is a new discovery to those seeking remedy to government criminal activity. All I can see from your link is that it was mutually taken to that court and I confess that I don't know why. All I do know is that where government departments are fraudulently taking money from 'man' outside of contract, they must press the record. When this is against 'man', entities have no standing because it's a man versus another man.